TOKYO:  Japan is increasing its consumption of imported wine and New Zealand producers are filling more glasses as a result.

The volume of all imported still wine to Japan 2007 was up 1.4 percent on the previous year with 14 million cases crossing the border. Domestic production of wine accounted for 6.8 million cases.

Imports of New Zealand still wine over the same period were up 5 percent on 2006 to 56,000 cases, and 25 percent over 2005.

Good growth was seen in the second and fourth quarters of 2007. That growth has continued in the first quarter of 2008 with a 15 percent increase in import volume over the same period last year.

Japan imports more than NZ$1 billion worth of still wine each year and New Zealand’s share of that is $7 million.  More than 100 New Zealand wineries export to Japan.

Although it has come down slightly, New Zealand wine has the highest average FOB price per litre of the top 10 countries exporting to Japan at NZ$14.

In comparison with other New World wines, Chile is NZ$4.50, Australia NZ$6.60 and Argentina NZ$5.20.  The growth those countries have experienced has largely been price driven at the lower end.

Generally, the retail price is 2-3 times the FOB price.

The growth segment in all still wine sales has been in the under ¥1500 ($20) range and also those wines priced over ¥5000 ($55). 

Import volumes for 2008 are expected to remain similar to 2007 with sales increasing through specialist wine stores, online and also direct marketing channels.

Recent price hikes on commodities and daily necessities in Japan though have led to consumers becoming more price conscious.

Not all of the price hikes have been passed onto the consumer with some of the retailers carrying the costs and watching how other retailers react.

Adjustments will be inevitable and discretionary spending will be looked at more closely. 

The Japanese will be able to take a very frugal approach to daily purchases very quickly and value for money will become an even more important selling point. 

Key facts:

• 44 percent of total imports sell for under ¥1000 ($12) and a further 27 percent are sold for between ¥1000-1500 (NZD12-20).
• New Zealand wine prices at retail generally start from ¥1500 with the largest retail share sold in the ¥1500-2000 range.
• On-premise volumes account for 38 percent of all imported wine with almost half of that selling for under ¥1000 ($12).
• 53 percent of New Zealand imported wine is sold on-premise with the largest share sold in the ¥3000-5000 ($35-55) range.
• Nearly half of all NZ wine in Japan has a retail price greater than ¥3000 ($35).

Key New Zealand wine-related events for 2009 are Foodex in March and the New Zealand Wine Day in June.

Contact:  Craig Pettigrew, trade development executive, NZTE,Tokyo.  Email:  craig.pettigrew@nzte.govt.nz

http://www.nzte.govt.nz/section/14482.aspx#tokyo